We’ve added tax update tabs for both personal and business related tax law changes.
Please contact our office at 414-352-3200 for more information on how these changes may affect your individual and/or business taxes.
If you own an IRA and are 70 1/2 or older, a Qualified Charitable Contribution (QCD) can provide you with substantial benefits. At 70 ½, IRA owners are required to make an annual minimum withdrawal (RMD). A qualified charitable distribution can satisfy all or part the amount of your required minimum distribution from your IRA and, at the same time, reduce your taxable income. Using this strategy can benefit both you and your designated charity.
Here’s how it works. A direct transfer is made from your IRA account by your plan to a qualifying charity. This helps the charity. Qualifying charities must be a 501(c)(3) organization that is eligible to receive tax-deductible contributions. Please note that fund distributions made directly to you do not qualify.
The contribution amount, while satisfying all or part of your annual RMD, can in most cases be deducted from your taxable income, potentially lowering your income tax liability.
- You must be 70½ or older to be eligible to make a QCD.
- QCDs are limited to only the amount that would otherwise be taxed as ordinary income. Non-deductible contributions are excluded.
- The QCD maximum annual amount is $100,000. It is the total sum QCD contributions made to any and all charities in a calendar year. Your spouse can also make a QCD from his or her own IRA within the same tax year for up to $100,000.
- For a QCD to count towards your current year’s RMD, the funds must come out of your IRA by your RMD deadline, generally December 31.
- You are not permitted to count any amount donated above your RMD toward satisfying a future year’s RMD.
While a QCD is not subject to Federal withholding, State tax rules may vary.
A QCD contribution requires you to receive the same type of acknowledgement from the charity of the donation you would need to claim any other deduction for a charitable contribution.
Your Mitz & Rozansky tax adviser can help you determine if both your IRA and charity qualify for QCDs. Please contact us at (414)352-3200 to discuss how a QCD can work for you.
The new tax reform law, commonly called the “Tax Cuts and Jobs Act” (TCJA), is the biggest federal tax law overhaul in 31 years, and it has both good and bad news for taxpayers. For information on how the new law affects your taxes, please contact Mitz & Rozansky at (414)352-3200 to learn more.
Below are highlights of some of the most significant changes affecting individual and business taxpayers. Except where noted, these changes are effective for tax years beginning after December 31, 2017.
- Drops of individual income tax rates ranging from 0 to 4 percentage points (depending on the bracket) to 10%, 12%, 22%, 24%, 32%, 35% and 37% — through 2025
- Near doubling of the standard deduction to $24,000 (married couples filing jointly), $18,000 (heads of households), and $12,000 (singles and married couples filing separately) — through 2025
- Elimination of personal exemptions — through 2025
- Doubling of the child tax credit to $2,000 and other modifications intended to help more taxpayers benefit from the credit — through 2025
- Elimination of the individual mandate under the Affordable Care Act requiring taxpayers not covered by a qualifying health plan to pay a penalty — effective for months beginning after December 31, 2018
- Reduction of the adjusted gross income (AGI) threshold for the medical expense deduction to 7.5% for regular and AMT purposes — for 2017 and 2018
- New $10,000 limit on the deduction for state and local taxes (on a combined basis for property and income taxes; $5,000 for separate filers) — through 2025
- Reduction of the mortgage debt limit for the home mortgage interest deduction to $750,000 ($375,000 for separate filers), with certain exceptions — through 2025
- Elimination of the deduction for interest on home equity debt — through 2025
- Elimination of the personal casualty and theft loss deduction (with an exception for federally declared disasters) — through 2025
- Elimination of miscellaneous itemized deductions subject to the 2% floor (such as certain investment expenses, professional fees and unreimbursed employee business expenses) — through 2025
- Elimination of the AGI-based reduction of certain itemized deductions — through 2025
- Elimination of the moving expense deduction (with an exception for members of the military in certain circumstances) — through 2025
- Expansion of tax-free Section 529 plan distributions to include those used to pay qualifying elementary and secondary school expenses, up to $10,000 per student per tax year
- AMT exemption increase, to $109,400 for joint filers, $70,300 for singles and heads of households, and $54,700 for separate filers — through 2025
- Doubling of the gift and estate tax exemptions, to $10 million (expected to be $11.2 million for 2018 with inflation indexing) — through 2025
- Replacement of graduated corporate tax rates ranging from 15% to 35% with a flat corporate rate of 21%
- Repeal of the 20% corporate AMT
- New 20% qualified business income deduction for owners of flow-through entities (such as partnerships, limited liability companies and S corporations) and sole proprietorships — through 2025
- Doubling of bonus depreciation to 100% and expansion of qualified assets to include used assets — effective for assets acquired and placed in service after September 27, 2017, and before January 1, 2023
- Doubling of the Section 179 expensing limit to $1 million and an increase of the expensing phaseout threshold to $2.5 million
- Other enhancements to depreciation-related deductions
- New disallowance of deductions for net interest expense in excess of 30% of the business’s adjusted taxable income (exceptions apply)
- New limits on net operating loss (NOL) deductions
- Elimination of the Section 199 deduction, also commonly referred to as the domestic production activities deduction or manufacturers’ deduction — effective for tax years beginning after December 31, 2017, for noncorporate taxpayers and for tax years beginning after December 31, 2018, for C corporation taxpayers
- New rule limiting like-kind exchanges to real property that is not held primarily for sale
- New tax credit for employer-paid family and medical leave — through 2019
- New limitations on excessive employee compensation
- New limitations on deductions for employee fringe benefits, such as entertainment and, in certain circumstances, meals and transportation
More to consider
This is just a brief overview of some of the most significant TCJA provisions. There are additional rules and limits that apply, and the law includes many additional provisions. Contact Mitz & Rozansky at (414)352-3200 to learn more about how these and other tax law changes will affect you in 2018 and beyond.
With the possibility of significant tax reform legislation this year, tax planning is more complicated yet more important than ever. To save the most, you need to be sure you’re taking advantage of every tax break you’re entitled to. Our 2017 Tax Planning Guide can help you follow current tax law with an eye on what could happen in the future with any possible legislation.
As you look through the guide, please note the strategies and tax law provisions that apply to your situation or that you would like to know more about. Then contact us with any questions you may have about these or other tax matters.
At Mitz & Rozansky, SC, our professionals are thoroughly familiar with the latest tax law and tax-reduction strategies and are eager to help you take advantage of them. So please call us today (414) 352-3200 to schedule a time to talk about ways to lighten your tax burden and better achieve your financial objectives.
Now more than ever, it is extremely important that as tax payers you utilize qualified tax professionals who will prepare your tax returns and will represent you should you be audited. Too often, tax payers hire someone who does not have the proper licenses and credentials required to be qualified to represent them, particularly given the complexity of the ever changing tax code.
The Tax Code Has Changed
As of January 1, 2016 the IRS tax code requires that anyone representing a taxpayer be qualified according to IRS specifications. To be sure that you will not have to seek additional services to represent you to the IRS, your tax preparation needs to be done by a CPA, Enrolled Agent (EA) or an attorney who is IRS qualified. Tax preparers, who do not otherwise qualify, can also complete the IRS’s voluntary Annual Filling Season Program. Only those who successfully complete the program, receive a Record of Completion allowing them to represent you to the IRS.
Employing qualified professionals not only assures that your tax returns are properly prepared, but it also provides you with a representative who can stand in for you at appearances before the IRS for such issues as audits, appeals and collections. They can speak to directly to an IRS representative on your behalf as well as make appearances for you at IRS hearings involving your tax returns.
At Mitz & Rozansky, LLC our CPA’s and tax preparation specialists prepare your tax return with the utmost care. They work diligently to ensure that you pay only the taxes required and they stand ready to represent you up should any tax related issues arise with the IRS. For additional information about this or any other accounting related matters, please contact us by phone at (414)352-3200 or via email at email@example.com.
The IRS and its Summit Security partners are warning taxpayers about another email scam involving tax bills. The bill arrives as an attachment to an email that states that the bill is for taxes due in connection to the Affordable Care Act (click here to see IRS advisory).
The IRS has received numerous reports around the country of scammers sending a fraudulent version of CP2000 notices for tax year 2015. Generally, the scam involves an email that includes the fake CP2000 as an attachment.
The CP2000 is a notice commonly mailed to taxpayers through the United States Postal Service. It is never sent as part of an email to taxpayers. It is a good practice to never open an attachment or click on a link within an email sent by any sources you do not know or are suspicious of. The issue has been reported to the Treasury Inspector General for Tax Administration for investigation.
Should you receive such a notice, please follow the instructions laid out in the article link shown above or contact Mitz & Rozansky. As always, the staff at Mitz & Rozansky is ready to assist you if you should happen to receive one of these emails or if you have any questions about your taxes or other financial matters. We can be reached by phone at (414)352-3200 or via email at firstname.lastname@example.org.
Ryan Walsh is returning to Mitz & Rozansky as a Manager.
Ryan began his career at MRSC in 2008 and worked closely with small to mid-size businesses and individuals, helping them with their accounting and tax planning/compliance needs. Ryan left MRSC to broaden his education and experience base in a wide range of accounting related activities. Each step along the way was a step forward in responsibility and encompassed substantial growth of his knowledge base. Those steps included:
Ernst & Young, Senior Tax Consultant
Tax compliance and audit provisions for large corporations
Quad Graphics, Employment Tax Manager
Employment tax compliance for 30+ entities, with roughly 25,000 employees
Monster Worldwide, Inc., Senior Accountant
Established and maintained monthly accounting procedures for several of their large European markets
Ryan stayed in regular contact with the principals at MRSC throughout his career advancement with the idea that one day he would return to our organization. Early this year Ryan met with Steve Rozansky and Sandy Mitz to discuss a possible return to MRSC. Everyone agreed that the time was fast approaching for Ryan’s return. Now that he has fulfilled his obligations to his previous employer and honed his skills, Ryan is returning to MRSC as a Manager effective August 15. We are all extremely excited to have him back and look forward to introducing him to our clients and integrating him into our account services group.
What should I do if I am contacted by the IRS?
First of all, please note that the IRS sends notices by mail, they will not contact you initially by phone or email. If you receive a phone or email inquiry, do not give the person any information as they are likely not with the IRS.
If you receive a letter or notice from the IRS consider the following:
It is never a good idea to disregard and IRS letter or notice. The issue in question needs resolution and will not go away if you ignore it. In fact, you may be subject to more severe penalties if you do not respond in a timely manner.
So first determine the nature of the inquiry. Then find the stated deadline for a response and determine if you will need additional time to respond. It is often possible to get additional time to respond to a notice, and you might even be able to resolve the issue by simply calling the telephone number provided on the notice.
It is a good rule of thumb to contact your tax professional for advice whenever you have dealings with the IRS. Mitz & Rozansky clients should call (414)352-3200 and speak to a member of our staff. We will assist you in compiling the necessary tax related information information and then guide you in properly responding to the IRS. If legal advice is required, we can even refer you to a qualified legal counsel specializing in dealing with the IRS on tax matters.
Get a free copy of your tax return
You can request a Tax Return Transcript free of charge using Form 4506-T rather than pay $50 per return to request a copy from the IRS by using Form 450: Request for Copy of Tax Return, Go to www.irs.gov and click “Get a Tax Transcript” to utilize the automated self-help service. You can also call 800-908-9946. If you are a Mitz & Rozansky tax client we will also supply you with a free copy of your return, if it was prepared by our firm.
Electronic Fund Transfer
The fastest way for you to receive your refund is to combine e-file with Direct Deposit. About 8 in 10 taxpayers use direct deposit likely because the IRS issues 9 out of 10 of these refunds in less than 21 days. If money is to flow the other direction because you owe taxes, the best way make the payment is with IRS Direct Pay. This free service can transfer money using the client’s checking/savings account, debit/credit card or Electronic Funds Withdrawal. Refer to the “Payments” tab at www.irs.gov for further guidance on transferring money electronically. If you are a Mitz & Rozansky tax client we assist you with electronic fund transfer procedures.
File your return even if you have a payment issue
By all means, file your tax return even if you are unable to pay some or all of the taxes you owe. If you owe money to the IRS and cannot make the entire payment, you should pay as much as possible to reduce interest and penalties for late payments. You need to file a Form 9465: Installment Agreement Request, with your tax return to request to pay in installments. You may also use the Online Payment Agreement tool to request more time to pay. If you are a Mitz & Rozansky tax client we assist you with instituting a payment plan.
Mitz & Rozansky will guide you every step of the way. Please contact us at (414)352-3200 for assistance with these and any other tax filing procedures.